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MANAGEMENT INFORMATION & MANAGEMENT INFORMATION & CONTROL SYSTEMCONTROL SYSTEM

CONCEPT OF MIS : Initial Concept was to process data & present it in the form of reports at regular intervals. Concept was modified with distinction made between Data & Information. Concept is similar to Raw Material (Input) & Finished Product (Output) System Concept of MIS. Another Concept is : Data is one but can be viewed by different people in different ways. Concept of Database & The MIS based on the Database is more effective.

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Gradually the concept of End User Computing using Multiple Database emerged this give Decentralisation of MIS System.

Analysis of Data relies on many academic discipline. This includes : Operation Research / Management Accounting / Human Behaviour / Psychology etc. making MIS more meaningful .

The academic disciplines are used in designing the MIS.

The Foundation of MIS is the Principles of Management & its Practice.

The concept therefore is a blend of Principles, Theories & Practices of the Management, Information & Systems.

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DEFINITION OF MIS :

MIS can be defined as a system that

1) Provides information to Support Managerial Functions like Planning, Organising, Directing, Controlling etc.

2) Collects information in a systematic & routine manner which is in accordance with a well defined set rules.

3) Includes Files, Hardware, Software & Operation Research Models & Process, Storing, Retrieving & Transmitting information to users.

MIS has more than one definition :

• A system which provides information support to the organisation.

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• A system based on the Database of the organisation evolved for the purpose of providing information to the people of the organisation.

• It is a computer based information system.

All above definitions converge to one single point :

The MIS is a system to Support The Decision Making Function in the Organisation.

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ROLE OF MIS IN AN ORGANISATION : Role of MIS can be compared to the Role of Heart in the Body. Ensures appropriate data is collected from the various sources, process & sent to all the needy destinations. The system is expected to fulfill information needs of an individual, group of individual, the various management levels. The MIS satisfies the diversified need : Through variety of systems, such as:

- Query Systems- Analysis Systems- Modelling Systems- Decision Support Systems

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MIS helps in Strategic Planning, Management Controls, Operational Controls, Transaction Processing etc.

MIS helps in Transaction Processing & answers their Queries on the Data pertaining to the Transaction, Status of a particular record & reference on variety of documents.

MIS helps Junior Management, by providing Operational Data for Planning, Scheduled & Control & helps further in decision making at the Operational Level.

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MIS helps Middle Management in Short Term Planning, Target Setting & Controlling the Business Functions.

MIS helps Top Management in Goal Setting, Strategic Planning & Evolving Business Plans & their Implementation.

MIS plays the Role of Information Generation,Communication, Problem Identification &Decision Making.

Thus MIS plays a vital role in the Management,Administration & Operations in the organisation.

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IMPACT OF MIS :

MIS impacts organisations functions, performance & productivity.

With proper MIS support, the Management of Marketing, Finance, Production & Operation & Personnel becomes more effective.

MIS calls for systematisation of Business Operation for effective system design.

This leads to streamlining the operation improves administration by bringing in discipline as everybody is required to follow & use systems & procedure.

Helps the organisation towards Process Driven & Not Person Dependent.

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Brings in High degree of professionalism in Business operations.

A well designed MIS with a focus on the Manager makes an impact on the managerial efficiency & motivates him to resort to such exercises as Experimentation & Modelling.

The use of computers enables the Manager to use tools & techniques which are impossible to use manually. Example : Forecasting New trains (Rly Traffic Mgt).

MIS works on the basic systems such as Transaction Processing & Database to transfer the drudgery of clerical work to a computerised system.

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Wastage of Time in Searching, Processing, Communicating is eliminated.

MIS reduces overhead & creates information based culture in the organisation.

MIS & COMPUTER :

Transforming the concept of MIS to reality is possible only with Computer.

Variety of HW Technology enables designing of MIS to specific situation. Example : Organisation with multiple locations use satellite communication over long distance.

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Ability of H/W to store Huge Data, Process at High Speed converting to information & Easy Access, Sort & Merge data in a particular manner, Complex, lengthy Analysis – done very effectively.

Computer is capable of digital, graphic, word, image processing etc. so it is used to generate information & present in a easily understandable form (Bar Chart, PIE Chart etc.)

Computer provides security of information (R/W, Read only, Access Control etc.) so it provides safe handling of sensitive information.

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S/W is an Integral Part of MIS & with development of ICT (Information & Communication Technology) has made distance, speed, volume & complex computing an easy task.

Application of Management Principles in todayscomplex business world is possible only when MIS is based on a Computer System Support.

MIS & ACADEMICS : MIS draws a lot of support from other academic disciplines.

Foundation of MIS is Management Theory.

MIS uses Principles of Management Designing the system & gives due regard to organisational behaviour.

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While designing the MIS report format & forming communication channel, MIS takes into account behaviour of the manager as an individual & in a group.

MIS gives due regard to personal factors such as BIAS, Thinking with a Fixed Frame of Mind, Risk Aversion, Strength & Weakness.

MIS is a decision support system & uses other areas of academics such as : -

- Operations Research- Queing Theory - ERP- Network Theory etc. used for planning -

Controlling Large Project.

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Application of PERT/CPM to a project planning & monitoring is possible through computer system easily.

While designing the MIS reports, attention is paid to avoid noise, distortion related to information.

MIS relies heavily on decision theory & decision methodology. Example : (Payoff Matrix)

MIS handles, with Mathematical Modelling Techniques, decision making under risk & uncertainty.

In the area of Accounting applications, MIS uses accounting principles & ensures data is correct & valid.

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Example : It uses principles of double entry in bookkeeping for balancing the accounts – It uses accounting methodology for generating trial balance, balance sheet & other books of accounts.

MIS uses knowledge from Management, BusinessManagement, Mathematics, Accounting,

Psychology, Communication Theory, Operations Research, Probability Theory, etc. for building process, methods & DSS systems in designing business applications.

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MIS & THE USER :

Every person in the organisation is user of MIS & different category of users have different information needs.

Each level of user has a specific task or role & corresponding informations need. Example : Need of information of a Clerk, Executive, Manager (Operational, Middle or Top Level).

It is observed that at lower level, MIS gives a sense of insecurity. MIS takes away the drudgery of repetitive search, collection, preparing statements & submitting to higher level.

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Work vacuum so created is not easily filed up. Thus crating a sense of insecurity & loss of importance of the person.

Positive aspect is clerk can make a quick search.

At the level of an Officer/Executive of MIS does the role of Data Analysis in a predetermined manager. This means knowledge of business is transferred from an individual to the MIS & made available to all in the organisation.

Concept of information is power with individual isLost.

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The Psychological impact is higher, if the person is not able to cope up with change by expanding or enriching his job.

The Middle Level Manager or Top Level Suffers the fear of challenge & exposure. The MIS makes his computer more effective. He is afraid of his position, decision & defence will be challenged.

However above negative points are seen in few cases & the positive impact at all levels are they become more effective operators.

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Through the MIS, the information can be used as a strategic weapon by the user to counter the threats in business & make business more competitive, bring about organisational transformation through integrated approach.

A good MIS makes organisation seamless byremoving communication barrier.

PROCESS OF MANAGEMENT & MIS AS A TOOL FOR THE MANAGEMENT PROCESS :

Process of management starts with setting of Goals, Objectives & Targets.

GOALS : Are long term objectives to be achieved by the organisation.

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OBJECTIVES : Are relatively short term milestones to be accomplished.

TARGETS : Generally refer to physical achievements in the organisations business.

Goals, Objective & Targets are so set that they are consistent with each other & help to achieve each other.

PROCESS OF MANAGEMENT :

1. PLANNING : Basic to all management functions. It is a decision making process determining in advance, What to do, How to do, When to do, Who has to do?

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Efficiency of planning is measured by the amount it contributes towards achievement of goals, with less investment or with less resources. (This is managerial effectiveness)

“MIS helps the Manager in Planning Process”

2. ORGANISING : Important step in the management it relates to the people in the organisation.

It deals with qualitative & quantitative role play, relationship etc.

Organising Involves:- - Defining various Management Levels & Span of control. - Defining Departments.

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- Relationship of Line & Staff Function.- Delegation of Authority.

3. STAFFING : Deals with creation of HR in the enterprise to achieve goals, objectives & targets set by the management.

4. CO-ORDINATING & DIRECTING :

After organising the resource, staffing planning, the process of implementing is dynamic.

The process meets with a number of difficulties & the Manager is supposed to resolve them. There will be LAG & LEAD in many activities. There could be short fall & over runs. There could be sudden developments, which may disturb the plans & Process of implementation.

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Managers role in this situation is to co-ordinate all the activities & provide leadership in the group to keep the Plan Moving.

“MIS plays a major role in this Management Process”

5. CONTROLLING : The last but the most important step in Management Process.

Control system works on the principle of feedback.

With advanced ICT, a variety of planning & control tools have been developed.

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MIS AS A TOOL FOR MANAGEMENT PROCESS :

The various processes of management require lot of data & information.

The requirement arises due to the fact that each step of management , variety of decisions are taken to correct the course development.

The decisions or actions are prompted by the feedback given by the control system of MIS.

The control of overall performance is made possible by way of budget summary & MIS report.

The MIS report showing sales, expenditure, ROI etc. Throws light on the direction the organisation is moving.

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Exception reports identify weakness in the management system.

If effective management system is to be assured ithas to be based on PROMPT business information.

Management performance improves in the business risks & uncertainties are handled effectively with

adequate information.

A good MIS provides information to the managers to expand their knowledge base. He must know the adverse trends in business, the shortfalls of failures in the management process.

A good MIS highlights the critical success factors & supports key areas of management.

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Modern fiercely competitive business scenario needs handling of business operations with skills

& foresight to avert crisis & relies heavily on MIS.

ORGANISATION AS A SYSTEM & MIS : A system is an assembly of elements arranged in a logical order to achieve certain objectives. Organisation is viewed as a socio technical system consisting of sub system of people, task, technology, culture & structure. Organisation continuously exchange information with environment & is influenced by the changes. Accordingly organisation has to be built in such a fashion that it adjusts with changes in environment & the goals & objectives are satisfied – OPEN SYSTEM.

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MIS should be designed viewing the organisation as a system.

MIS should give due importance to the human side of the organisation & its culture. Task & technology are physical aspects of the organisation but culture & people are very difficult to assess from MIS design point of view. MIS & ORGANISATION : In a vertical structure with high degree of centralisation, MIS should give control information to the higher management where decision is centred. If the organisation structure is based on a functional basis (Horizontal span of control, where functional head is key decision maker & all functions are equally importance than MIS will have a functional design with information support to functional head.

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MODIFIED MODEL OF ORGANISATION SYSTEM

TASKS

PEOPLE STRUCTURE

TECHNOLOGY CULTURE

GOALS

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STRATEGIC MANAGEMENT OF BUSINESS & MIS

CONCEPT OF CORPORATE PLANNING :

Plan is a predetermined course of action to be taken in future. Goals & objectives that a plan is supposed to achieve are the pre-requisites of a plan & setting of goals & objectives are primary task of management. Planning is a dynamic process involving chain of decisions. Essence of planning is to see the opportunities & threats in future & predetermine course of action to convert opportunity to business gain & meet the threat to avoid any business loss ( Swot Analysis).

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Planning can be Long Range or Short Range.

Long Range Planning : Is for 5 years or more. Deals with growth, Rate of growth & Image business share etc.

Short Range Planning : Is for 1 year at the most. Concerned with attainment of the business result for the year.

Goals relate to long term planning.

Objectives relate to short term planning.

“Corporate Business Planning deals with Corporate Business Goals & Objectives”.

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Corporate plan considers the world trends in the business, the industry, the technology, the international markets, the competitors, the corporate strength & weakness etc. & is a complex exercise to steer the company through difficulties, uncertainties etc.

ESSENTIALITY OF STRATEGIC PLANNING :

Why strategic planning?

1. Market Forces2. Technological Change 3. Complex Diversity of Business4. Competition 5. Environment (Threats, Challenges, Opportunities)

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1. Market Forces : Unpredictable demand & supply / trends in market growth / consumer behaviour & choices / new products & concepts

- The Market force effect sales, growth & profitability.- A proper business plan is needed to counter these.

2. Technological Changes : New technology worldwide have threatened current business creating new opportunities. Example : Electronics Industry.

- Absence of a corporate plan, such new technology change can bring about threats of survival or loss of

opportunity.

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3. Complex, Diversity of Business : The scope of business is wide & the variety of products, different market segments, manufacturing methods, multiple locations, dependence on external factors such as transport etc. bring complexity in the management of business.

Many factors are uncontrollable & unless there is a plan, considering above diversity, management lead to loss of business opportunity.

4. Competition : This is a natural phenomenon in business & management should continuously evolve new strategies to deal with competition.

5. Environment : This is beyond the control of management forecasting probable environmental changes is a major task of corporate planning.

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DEVELOPMENT OF BUSINESS STRATEGY

LONG RANGE STRATEGY :

Like any other business activity, planning also has a process & methodology.

Corporate planning is a top management responsibility. * It starts with social responsibility - Spells out business mission & goals, - & Strategies to achieve them.

STEP –1 : Communicate to all, the social & economic responsibility of the organisation (Mission Statement) : Direction of the organisation – decides scope & boundary of the business.

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STEP – 2 : Set goals of the organisation. The goal is more specific & time span of 3-5 years.

Describes certain business aspects such as : Largest market share / Leader in industry / Dominent in some product / Service / Reach & distribution etc.

Goals become a reference for top management in planning the business activities.

STEP – 3 : Set various objectives of the organisation objectives are are defined in terms of business results to be achieved in a short duration of a year or two.

Objectives are measurable & can be monitored (Profitability, Sales, Quality Standard, Capacity

Utilisation etc.) When achieved, objectives will contribute to

the accomplishment of goals & subsequent mission.

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STEP – 4 : Set Targets : for more detailed working & reference for operations.

The success in achieving the goals & objectives is directly dependant on the management business strategies.

Business is like a war where two or more competitors are set against each other to win & are constantly in search of a strategy to win.

“It enabled MIS is a strategic business weapon for growth & survival”.

Strategy means : The manner in which the resources (Man, Material, Money) & the know how will be put to use over a period to achieve goals.

“The game is to evolve strategies & counter strategies & counter strategies to win”.

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STRATEGY FORMULATION :Strategy formulation is an unstructured exercise of

complex nature riddled with uncertainties.

TYPES OF STRATEGIES :A strategy means a specific decision(s) regarding

deployment of resources to achieve the missions or goals of the organisation.

Strategy can be classified into four broad classes : -1. Overall company strategy : Very long term &

deals with overall strength on organisation. 2. Growth Strategy : May be for existing business

or diversification.3. Product Strategy : Choice of a product which can expand as a family of products.

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4. Market Strategy : Deal with distribution / Services / Market Research / Pricing / Advertising / Packing or Choice of Market Itself.

- There are no way of predicating selection of correct strategy – only results can prove.

TOOLS OF PLANNING : Are tools of decision making with reference to planning. These tolls systems approach, sensitivity analysis & modelling.

MIS & BUSINESS PLANNING : 1. Decide goals & objectives. 2. Determine correct status of business & projects. 3. Provide correct focus for management action attention.

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4. Evolve, Decide the Mix of Strategies.5. Evaluate Performance & Give Feedback.6. Provide Cost / Benefit Evaluation.7. Generate Standards / Norms / Ratio’s / Yardstick for Measurement & Control.

SHORT RANGE PLANNING :

Short Range Planning deals with targets & objectives of the organization & provides implementation plan.

Plans are made for one year in terms of TARGETS to be achieved within a BUDGET.

A manufacturing co. will make targets for production, sales, capacity etc.

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Budget gives details of resources required to achieve target. Budgets are prepared first in terms of PHYSICAL UNITS & then converted into financial units.

Companies prepare budgets for sales, production, revenue expenses, capital expense, raw material, advertisement etc.

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Budgets are CONTROL MECHANISM.

GOALS & OBJECTIVES

SHORT RANGE FORECAST

PREPARE OPERATIONAL BUDGET

SALES PRODUCTION MATERIALS SERVICES

INDIRECTEXPENSES

CAPITAL GOODS

CAPITALEXPENSES

CORPORATEOVERHEADS

INDIRECTEXPENSES

DIRECT LABOUR

MANUFACTURINGOVERHEADS

FINANCIAL BUDGET

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BASIC OF MIS

DECISION MAKING CONCEPTS: It is a fixed intention to bringing to a conclusive result, A judgement !

Decision making is a complex process in the higher management level due to the interrelationship among decision makers, a job responsibility, question of feasibility, code of morals, ethics etc.

Rational decision is one which effectively ensures achievement of goals for which the decision was taken.

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DECISION MAKING PROCES

INTELLIGENCE

DESIGN

CHOICE

(1) Recognition that problem must be solved / opportunity to be exploited – Gather Data

(2) Understand the problem / generate solutions

(3) Choice made & Implemented

HERBERT SIMON MODEL(1)INTELLIGENCE : Raw Data collected processed &

examined.(2)DESIGN : Inventing, Developing & Analysing the

different decision alternatives.(3)CHOICE : Select one alternative as a decision, based

on selection criteria.

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In the design phase, mgr. Develops a model of the problem situation & generates & tests different decisions. In the choice phase, mgr. Evolves a selection criteria such as max. profit, least cost etc. The criteria is applied to various alternatives& the one which satisfies most is selected. In these three steps, if the MGR. Fails to reach a decision. The process is repeated. MIS achieves this efficiently WITHOUT REPEATED use of Simon Model

Ex : A manufacturing plant with underutilized capacity & products not contributing to profit – Identified Prob Find product mix for manufacturing plant to fully utilize WITHIN the raw material & market constraints & profit maximize.

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-This is a problem of optimization & use Linear Programming (LP) model.-Model evolves various solutions / decision alternatives.-Choice is made based on first feasibility & then on basis on maximum profit. DECISION MAKING SYSTEMS - If the decision is to be taken in a KNOWN ENVIRONMENT, it is a CLOSED DECISION making system. Ex: A manufacturing product mix problem. - If the MGR. Operates in an UNKOWN environment, it is a OPEN DECISION system. Ex : Deciding pricing of new product / plant location etc. - MIS tries to CONVERT OPEN SYSTEM to CLOSED system by providing information.

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INFORMATION

INFORMATION CONCEPT:- Information differs from data. Information has a value in decision making – while data does not have. Information Characteristics:-• Improves representation of an entity.• Updates knowledge level (Ex: Sales Data)• Reduces uncertainty• Aids in decision making. Ex: Sales Data progressively become information when processed with other data such as target.

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Conceptual model of communication:-

SourceTransmitter

EncoderChannel

ReceiverDe-coder

Destination

(Data / Information)

(MIS) (Reports) (Interprete) (MGMT.)

Noise Distortion

Poor Quality of Creates Information Confusion

(ABOVE MODEL OF COMMUNICATION USED IN MIS)

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Information Presentation:- Improve communication through summarization.

Improve by message routing copies of circular.

Curb misuse of information by exercising control on the content & distribution.

Information BIAS: Should not be biased while classifying & filtering / Communicating information.

BIAS enters because people try to block sensitive information.

To overcome this, a formal organization structure & top management decides information type / received.

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Way information is presented, may create BIAS. Ex: If information is presented in alphabetic order & it is lengthy.

INFORMATION : A QUALITY PRODUCT

Information is a product of data processing. Quality of information can be measured on four dimensions: (1) Utility (2) Satisfaction (3) BIAS (4) Error.1. UTILITY: Has four facets : (1) Form (2) Time (3) Access (4) Possession.2. SATISFACTION OF USER: Is a common key of measuring utility.3. ERROR: Error creeps in due to

Incorrect data & collection method.

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Incorrect data processing. Loss or Incomplete data. Poor data validation or control. Deliberate falsification.

Processing or data to information should be allowed only

after thorough validation.4. BIAS: If the information is processed out of biased data, it will have BIAS.

PARAMETERS OF QUALITY OF INFORMATION1. Impartiality : No BIAS2. Validity

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3. Reliability4. Consistency : Data should have consistent 5. Age : If the information is old, it is not useful today.

CLASSIFICATION OF INFORMATION:1. Action vs. No. of action information:- Ex: “No stock” report calls for purchase action.2. Recurring vs. non Recurring information:-

Ex: Monthly sales report vs. market study information.3. Internal vs. External information:-

Ex:-Information generated through internal resources vs. information generated through govt. report.

4. Planning information:Ex: Needs norms/ standards / specs.

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5. Control Information:-Ex:Reports giving status of activity with feed back mechanism.

6. Knowledge information:-Ex: Collection of information through library reports / research studies to build up a knowledge base for decision making.

Information can also be classifiedBASED ON USAGE:- Organization information:- Used by all in

organization. Database information :- When multiple use & apply. Operational / Functional information:- When the

information is used for operations.

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Top Management

Middle Management

Operational Management

LOW

STRUCTURED INFORMATION

HIGH

EXTERNAL

SOURCE OF INFO

INTERNAL

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METHODS OF DATA & INFORMATION COLLECTION:-

Choice of methods have an impact on quality of information. Methods of data collection & processing is part of MIS. Methods of Data & Information Collection

• Observation: = This methods are chosen for data & information collection & specific problem. = Remaining are routine methods particularly irrespective of a problem. Ex:Visit customer to assess complaint.

• Experiment: Ex:Assess market response to new packaging. (Thru test marketing)

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• Survey: Ex: Market survey, opinion poll.• Subjective Estimation:Ex: Data pertaining to future

like life style in 21st Century/ Future of alternative

energy source.• Transaction Processing: Ex:Ledgers, Payroll, sales

report etc.• Purchased from outside: Ex:Database on specific

subject, research study etc.• Publication: Ex: Corporate publication, industry

publication, NCAER report.• Government Agencies: Ex: RBI, tax publications

etc.

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Human Being as Information Processor :

An experienced Manager is a skillful information processor & able to decide. While processing, manager also uses knowledge from his memory. Filtering is a process whereby manager selectively accepts input.

BRAIN Use of Stored

Knowledge & Experience

INPUT FROM

EYES, EARS

FILTERING &

BLOCKING

MENTAL PROCESSING

APPLICATIONSELECTION

MANI PULATION

OUT PUTDECISION

ACTIONREGISTRATION

GENERALISED MODEL OF INFORMATION PROCESSOR

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Filtering process blocks the unwanted or inconsistent Data which does not match the requirement.

An inexperienced Manager may Omit Data, Distort Data.

The information processor establishes filter based on experience.

MIS & THE INFORMATION CONCEPT:

Goal of MIS : should be a provide information which has a surprise value & reduces uncertainty. Build knowledge base in the organisation by processing various Data from different source. Design of MIS should take care of DATA PROB Knowing that it may contain BIAS & ERROR., with help of validation, checking, controlling procedure in the manual & computerised system.

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While designing MIS, due regard should be given to the Communication Theory of transmission. Special care is needed to handle noise & distortion Principles of summarisation & classification should be carefully applied giving regard to management levels. Care should be taken in the process that no information is suppressed or over emphasised. MIS should provide specific attention to quality parameters. MIS should make a distinction between different kind of information. (Action vs No-Action etc.) MIS needs to give due regard to the information used for planning, controlling etc. MIS should recognize some aspects of Human Capabilities since decision makers are human.

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MIS design should meet the needs of the total organisation - For design consideration, it is divided into top, middle, supervisory & operational.

MIS design should ensure input data quality by controlling data for validation, reliability, consistency etc.

Recognising information may be misused, if falls in wrong hands, MIS design should have feature of filtering, blocking, suppression, delayed delivered etc.

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Adhoc, Unformatted, Regular But

Modified Frequent,

Display & Print

Top Chief Executive & Board

Goal Setting Policy Making

Strategic Planning Accurate Futuristic

Very High, Meeting High Risk & Uncertainty Situation

Un-structured

Middle Division,

Department , Product

Managers

Decision Making Problems Solving

Monitoring & Achieving Business Planning &

Schedule

Exception, Precise,

Analytical Decision

Oriented, Related to Past, Current

Future

High, Meeting Risky Situation

Supervisory Jr. Managers, Supervisors,

Officers

Problem Solving & Meeting Targets

Processed & Summarized and

Classified for the Current Period

Low, Meeting Near Certainty

Situation

Given at Fixed Interval Display &

Print

Operational Assistants, Clerks

To Know the Status

Facts Detailed Relating To

Current Period

Lowest

Large Volume Print

Levels of Management Nature of Information Reporting Media and Structure Organisational Pyramid Information Concept

Use of MIS Value of Information

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SYSTEMS (Systems & Procedure Systems Manual)(DBMS/DSS/SAD are part of MIS handled by S/Weapon)

System Concepts: System is a set of elements arranged in an orderly manner

to accomplish an objective Ex: Systems Elements Objective 1. Computer - I/O, Processor - Process Data &

O/S, DBMS etc. Provide Information2. Business - People, Plant, - Produce Goods & Organisation Machinery, Services to

Achieve Material, Money etc. Business

Objective A system is arranged with some logic governed by rules,

regulations, policies.(Three Basic Parts of System)

INPUT PROCESS OUTPUT

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A system may have single input & multiple output or may have several inputs & outputs. Ex: A business system has several inputs & multiple objectives such as sales, profit growth service etc.

All systems operate in an environment. The environment may influence the design of system.

When a system is designed for achieving some objectives, IT automatically sets boundaries for itself. If new objectives are introduced, it may not function. Ex: A computer system designed for commercial data processing cannot achieve designing graphics, drafting, since system elements & boundaries do not permit. Ex: A business enterprise with profit objective cannot function of a objectives becomes social respect job providing)

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ENVIRONMENT

FILTER

PROCESS OUTPUTINPUT

Systems are designed for specific objective/output, so the designer puts a filter around the system to control the influence on the system. Ex: A MFG. System with objective to produce desired quality so QC system vs filter.

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SYSTEM CONTROL: Most important part of a system.

Systems are designed for achieving specific objective & this achievement is ensured through system control, which becomes integral part of system design.

‘SENSOR’ measures ‘OUTPUT’ or achievement ‘STANDARD’, through ‘COMPARISON UNIT’.

‘FEEDBACK’ is result of ‘COMPARISON’ of ‘OUTPUT’ with ‘STANDARD’

If ‘FEEDBACK’ is positive, system continues processing. If ‘OUTPUT’ is not OK with STANDARD, then feedback is provided to stop system.

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INPUT PROCESS OUTPUT

CORRECTIVE UNIT

COMPARISONUNIT

SENOR

STANDARD

(Feedback)

(Control)

CONTROL SYSTEM MODEL

‘CONTROL’ is the process of measuring OUTPUT, COMPARING with STANDARD, sending signal to CORRECTIVE unit which takes action.

A system designed for specific objective without any control will perform disorderly.

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MIS & SYSTEM CONTROL CONCEPT:

Corrective unit in the MIS is the Manager or decision maker.

Through a process of decision making, the Manager ‘CONTROLS’ the business system so that desired result is achieved.

A business system will have corresponding management information system to help manager run the business system with necessary information feedback thereby enabling controlling (taking decisions for the organisation to resolve any out of line situation towards achieving the goal) the business operation to achieve the desired objective (output).

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System Components

Business SystemManagement Information

System

Inputs Raw materials, plant and machinery, manufacturing, selling arrangement, accounting

Transactions of purchase, production and sales, receipts and payments.

Process Purchasing, manufacturing, selling, accounting.

Transaction processing and data processing

Outputs Quantity of production sales, stock, income and profit.

Computation of production in numbers, sales in value, stocks in weight, income and profit in rupees.

Sensor Profit Income less assigned cost.Comparison Unit

Expectation of profit vs actual profit.

Algebraic comparison module to compare income vs budgeted income, profit vs budgeted profit (standard).

Standard Profit. Budgeted profits of various products.

Feedback Balance Sheet. Exception reports after analysis showing products earning profit below the budget.

Corrective unit Managing Director. Marketing Manager.Decision to correct the situation

Business decisions. Pricing, advertising and promoting decisions.

Goals and objectives

Business goals and objectives. Provide that information which supports in achieving the MIS goals and objectives. 90

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TYPES OF SYSTEM :

A system is defined & determined by its boundaries & objectives.

When many smaller systems together make a larger system, the smaller systems are subsystems.

SUBSYSTEM1

MANUFACTURING

SUBSYSTEM2

QUALITY CONTROL

SUBSYSTEM3

MARKETING

SUBSYSTEM IN SERIAL ORDER

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A large system is always complex & difficult to understand. So for understanding it, the system is split into smaller subsystems. HIERARCHIAL STRUCTURE : Can be viewed for most systems. Breaking the system in a hierarchical manner provides way to structured system analysis & gives clear understanding of the contribution of each subsystem in terms of data flow & decisions & it interface with other subsystems. (EX: Bill passing system)

Part of system analysis & design.

CATEGORY OF SYSTEMS :

DTERMINISTIC SYSTEM : When inputs, process & output are known with certainty. EX : The accounting system.

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PROBABILISTC SYSTEM : When system output can be predicted in probabilistic terms. EX: Demand forecasting system. CLOSED SYSTEM : When system functions in isolation does not exchange with environment. EX : All kinds of accounting system, stock, attendance system etc. OPEN SYSTEM : If the system exchange with environment & influenced by IT. EX : Marketing, Communication, Forecasting System “Business organisations are open systems” “All open systems must have self organising ability & adjust to environmental changes”. Generally deterministic systems are closed systems & probabilistic systems are open.

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Deterministic & closed systems are easy to computerise as they are based on facts & behaviour can be predicted with certainty. EX : Accounting, Invoicing Systems. Probabilistic & open systems are complex & calls for considerable checks & controls that system performance can be controlled. EX : Pricing systems are probabilistic open. They are so designed that external environment like Govt. policy on Tax, Excise supply position changes are taken care.

HANDLING SYSTEM COMPLEXITY : Information systems are relatively complex as compared to physical system. To enable MIS DESIGNER to understand design, develop & implement, the complexity is handled by viewing the system as assembly of subsystems.

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The subsystems are put in hierarchial order to provide a structural view to the designer. EX : Materials management system.

Have following subsystems. (A) Procurement System (B) Purchase order follow-up System (C) Receipts accounting system (D) Material requirement planning system (E) Material issue requisition system (F) Bill payment system (G) Inventory control.

Subsystems a re interconnected & each system inter connection acts as a channel for input output communication.

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C DA

B

F

E G

*

SUBSYSTEMS WITH INTER CONNECTIONS * F = Bill Payment System

Collate BillTo P/O

Collate Bill to Goods Receipt Voucher

Compute Amt Payable

Prepare Cheque &Payment Voucher

Bill Scrutiny Bill Booking with P/O

Bill Scrutiny Audit Compute Gross

Taxes

Finance Acct.

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SYSTEM EFFICIENCY & EFFECTIVENESS : EFFICIENCY : Indicates the manner in which inputs are used by system i.e. right way. If the output/input ratio is adverse, it is inefficient. EFFECTIVENESS : Means producing the right output in terms of quantity & quality. When the system is ineffective, the system is out of control & need major correction.

POST IMPLEMENTATION PROBLE IN A SYSTEM The MIS designer designs & develops & implements the information system within organisation. When systems are allowed to run for some time, they tend to become disorganised resulting in system inefficiency. The process of decay & its cause is called ‘ENTROPY’.

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The designer introduces a negative entropy (i.e action to arrest decay) & the system is brought back to normal state. This process is called system maintenance. Steps for providing negative entropy:- 1. Periodical review of system 2. User meeting to assess satisfaction / utility 3. Subjecting system to audit check through test data. EX: Of system maintenance System Indication of Entropy Negative Entropy 1. Human Body - Loss of Weight / Headache -Medical checkup /

DIET / Medicine 2. DATA Processing - ERROR/OMISSION - Review & introduce

in Data Entry Streaming Procedure

3. Information - Decline in the Utility & - Reset Goals of Info. Processing Satisfaction, Changed System

Modify/ADD Information need Revised System

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MIS & SYSTEM CONCEPT: MIS is a combination of data processing & information system in an orderly manner to support management. In achieving business objective. MIS boundary cross limits of organisation & draws data from external environment. MIS follows system model & works on the principle of feedback & control. MIS provides information of exceptional nature related to business. MIS initially concentrates on quality of input : Impartiality / validity / reliability / consistency & age. MIS provides a system for data processing & data analysis – uses operational research etc.

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MIS is a combination of deterministic & closed system & probabilistic & open system.

Complexity of MIS is handled by simplifying the subsystem, decoupling etc.

To arrest decaying of the system in post implementation stage, it is necessary to provide negative entropy to the system.

A good MIS is founded on the indepth system analysis of the business & management process.

Elements of MIS are computer hardware, communication channel, software, s/w tools, the development plan, well defined measure objective of MIS consistent to business objective.

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SOURCING

DATA ACQUISITION

DATA ENTRY

DATA VALIDATION

TRANSACTION PROCESSING

DATA PROCESSING

DATA STORAGE AND ACCESS

PRODUCTION

QUERY PROCESSING

EXCEPTATION REPORTING

DATABASE, KNOWLEDGE BASE

DECISION SUPPORT SYSTEMS

OPERATIONS RESEARCH AND APPLICATION PACKAGES

EXPERT, AND ARTIFICIALINTELLIGENCE SYSTEMS

PROCESSING

MIS MODEL

General Model of MIS & Subsystems

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SYSTEM ANALYSIS & DESIGN TYPES OF INFORMATION SYSTEMS :

1. DATA Processing Systems : Focus is on computing existing Data.

2. Transaction Processing Systems : Processing of transactions using stored data & business rules. Focus is non transaction execution.

3. Functional Systems : Production, Sales, Finance function where several transaction & stored Data is used. Focus is on operation.

4. Integrated System : More than one system is processed together to produce an updated status & business result. Focus is on process management across organisation.

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5. Enterprise Management System : It is a set of systems functioning in respective areas providing service inputs to other systems in the organisation. Focus is on decision support for strategic management to achieve enterprise goal & mission. The Need for System Analysis : For computerising an information system it is necessary

to analyse the system from different angles. Analysis is the basic necessity for an efficient system design. Need for analysis arises from following : 1. System Objective : It is necessary to define system

objectives – (Purpose, business requirement etc.).2. System Boundaries : It is necessary to establish system

boundaries which would define the scope & coverage of the system.

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3. System Importance : Necessary to understand the importance of the system in the organisation it will help the designer to know the utility & decide design features of the system.

4. Nature of System : Analysis will help designer to know if it is open / close / determine / probabilistic.

5. Role of System as an interface : System may act as an interface to other systems. It is necessary to understand role of the system as an interface to safeguard interest of other system.

6. Participation of User : Strategic purpose of the system is to seek the acceptance of the people to a new development. System analysis process provides a sense of participation to the people & helps acceptance.

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7. Understanding Resource Needs : In terms of Hardware / Software & investment requirement for management to decide (BASEDON ROI).8. Assessment of Feasibility : Analysis of system helps to establish feasibility in terms of technical, economic & operations. Approach & Steps in System Analysis & Design : STEPS : -1. Need for Information : Define Nature of information

who needs – identify users & applications. 2. Define the System : Decide nature of system & its scope

– helps determine benefits & complexity. 3. Feasibility : Technical success / economics viability –

study investment (H/W, S/W).4. Detailing Requirement : Identify strategic, functional &

operational information need.

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5. Conceptual System Design : Determine the inputs, process & outputs & design a conceptual model.6. Detailing the System Design : Draw the document flow charts & data flow diagrams, data & system hierarchy diagrams, mapping of data / information vs users7. Structuring the System Design : Break the system into hierarchial structure. 8. Conceptual Model of Computer System : Define step by step usage of files, process & interface. Define the data structure & validation procedure.9. Break the System in Programme Modules : Make a physical conversion of the system into programme structure in a logical manner – modules will be data entry, validation, processing & storing.

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10. Develop Test Data to Check System Ability : Test the modules in terms of system integrity, input vs output.11. Install the System : Install on the H/W – Test, Run before users start using.12. Implementation : Train users / run paraliel / prepare user manual.13. Review & Maintenance : Review the system through audit trail & test data / confirm objectives MET / carry modification if necessary – helps to maintain system quality.

System Analysis of Existing System : When objectives are finalised, the first step towards development is to analyse existing system. It helps to achieve * Understanding existing system & objectives.

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* Are the information needs fully justified. If so, is the cost of system design compares ok with cost of increased value of information. * Evaluating the system for computersiation. Procedure for Analysing existing system : * Carryout analysis at a place where the system is functioning. * Note key persons who contribute to system operation. * Spend time with operating persons & observe the system to understand finer details Understand Scope of the system & its objective identify problems faced in the system. Collect all documents raised by the system & note who raises the DOC. & manner of distribution these DOC. Carries data from one point to other.

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Collect Outputs such as statements reports etc. Make list of rules, policies, guidelines etc. Note check points & controls used in system which ensures data flow is complete, processing is correct & analysis precise. Study the flow of data in the system.

Make a system study note & discuss with head of deptt on your system understanding & view to ensure it is same with HOD’s Ascertain if he has any other

objectives from the system. Examine feasibility of new objectives implementation.

Draw a revised flow chart to indicate how the system runs the major steps of processing chart should indicate all modifications suggested & accepted. Discuss the flow chart with operating persons & explain the modified system.

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Make a list of outputs (Statement reports) containing information & have HOD’s approval. Analyse requirement of information from utility point of view. More information – higher the generation cost decide the utility based on value of information. Compare cost of old & new system & benefits offered.

Obtain approval of the new system from the users & top management.

Write a system manual for use of the people in the department & for reference to the other users of system.

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Prototyping is a critical step where user understands the system in initial stage & helps try out ideas.

“Life cycle procedure is a tool for the system designer. Its meticulous following is a safe method to accomplish system objectives”.

SYSTEM DEVELOPMENT MODEL

For designing a good system, developers traditionally used the “WATERFALL MODEL”. Like Waterfall (Flows from top to bottom) the system development process moves from top to bottom in steps. Like water does not rise from a lower level to a higher level, it is presumed that once the step in a model is over, it is not required to go back.

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This model is OK where the system requirement specifications do not change frequently & minor changes can be taken care through small design changes. This model applies well to basic rule based data & information system. Example : Accounting, Materials, Production Planning, HR etc.

MISSION & GOALS

INFORMATION NEEDS SEPCIFICATION

ANALYSIS

SYSTEM DESIGN

PROCESS DESIGN

TESTING

IMPLEMENTATION

MAINTENANCEWATERFALL MODEL

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SPIRAL MODEL : For system development Some systems are more dynamic & require changes in system requirement specification (SRS) frequently. These modifications are called versions of the basic model. A popular model developed by Boehm is a Spiral Model. A spiral model is useful for developing large systems where specifications cannot be finalised in one stroke completely & correctly. Some changes surface while using the system after testing. The new versions provide additional functionality, features & facilities to the user of the system i.e performance, response, security etc. The user wants a system to be user friendly reliable & effective – while the developer wants the system easy to modify, easy to understand portable & compatible with other system.

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SPIRAL MODEL

Testing Implementation Maintenance

Mission & Goals

V 1 V 2 V 3

Processed System D. Analysis Info. Need

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DEVELOPMENT OF MIS : Development of long range plans of the MIS:

Any kind of business activity calls for long range plans for success. Same is true for MIS.

In MIS, information is treated as a major resource like capital time & capacity. If this resource is to be managed well, it calls for management to plan & control it for appropriate use in the organisation.

Unfortunately most organisation do not recognise information as a resource. It is treated as one of many necessities to conduct business.

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Many organisation have spent money on computers for data processing, filing returns / reports to Govt. used mainly for accounting & business transaction. As a result information processing function of computer never got importance. With advancement in computer technology (Communication / Storage / Intelligence etc.) computers an be used as a tool for information processing. We now a days need, a computer system flexible enough to deal with changing need of information. It should be designed as an open system continuously inter acting with business environment. The Plan of MIS is concurrent with the business plan of organisation. Management needs are transformed to information needs for the designer to evolve a plan.

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CONTENTS OF THE MIS PLAN :

A long range MIS plan provides direction for the development of the system & provides a basis for achieving the specific targets or tasks against a time frame.

MIS plan is linked with business plan.

The goals & objectives of MIS should be so stated that they can be measured. Typical statements are like :-

- Provide online information on Stocks, Markets Accounts.

- Query processing should not exceed more than 3 sec.

- Focus of the system will be on the end user computing & access facilities.

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Business Plan vs MIS Plan :

Business Goals & MIS Objectives in Line with Objective Business Objective Business Plan & Strategy Information Strategy Playing

A Supportive Role Strategy Planning & Architecture of MIS to Decisions Support Decisions Management Plan for System Development Execution & Control Schedule, Matching Plan of

Execution Operation Plan for H/W & S/W plan for for the Execution procurement and

implementation

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STRATEGY FOR PLAN ACHIEVEMENT :

Development Strategy An Online, Bath, Real Time

System Development Approach to Development Strategy - Operational vs Functional

- Accounting vs Analysis- Distributed vs Centralising - One Database vs Multiple

Resource for System Inhouse vs Outsource Development - Customised Development

vs Use of Package

Man Power Composition Analyst, Programmer, Skillsand Know How

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DETERMINING INFORMATION REQUIREMENT :

Difficulties to determine correct & complete information due to:

1. Capability constraint of human being as information processor.

2. Nature & variety of information.3. Reluctance of decision maker to spell out the

information for behavioural reasons. 4. Ability of the decision maker to specify the

information. Sole purpose of the MIS is to produce such information

which will reduce uncertainty moment unknown becomes known, the decision makers job becomes simple.

Inspite of above difficulties, methods have been evolved, based on degree

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METHODS OF DETERMINING INFORMATION REQUIREMENTS :

1. Asking or Interviewing 2. Determining from existing system.3. Analysing the critical success factors.4. Experimentation & modelling.

1. Asking or Interviewing : In this method, designer of MIS puts Q’s or converses with

user of information & determine information need. Asking Q’s is an art & it should be used properly to seek

information. The experts or experienced users are asked to give their

best answers & this approach is called DELPHI Method. An experienced designer is able to analyse the answer for correct information need.

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2. Determine From Existing System :

Systems from other companies can give additional information requirement.

Text books, handbooks, has funds of knowledge for information requirement. EX: Accounting Information Requirement / Payroll / Accounts Payable / Inventory Control / Finance Accounting etc.

Managers at middle & operating level mostly use the existing system as reference for determining information requirement.

Where rules & regulations are laid down (by Govt. / Company Law Board for Share Market).

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3. Analysing the Critical Factors :

Information requirement identified by critical success factor of an organisation. EX: Information requirement for management of technology in a high tech business.

Information requirement for a service organisation where management of service becomes a critical factor.

So the information requirement of such organisation largely depend on these critical factors.

The analysis of these factors will determine the information need.

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4. Experimentation & Modelling :

User resort to this method where there is total uncertainty experimentation would decide the methodology for handing complex situation. If the method is finalized, the information needs are determined.

Sometime models are used to determine initial information need. The information requirement undergo qualitative change as the users get the benefit of learning.

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DEVELOPMENT & IMPLEMENTATION OF MIS : Having made the plan of MIS, the development call for determining the development strategy. Development strategy determines where to begin & in what sequence.

PROTOTYPE APPROACH :

When the system is complex, the development strategy is prototyping of the system.

Prototyping is a process of progressively finding information need, developing methodology, trying out on a smaller scale with respect to data & complexity – Ensuring that it satisfies the user need & assess the problems of development & implementation.

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This process identifies the problem areas & inadequacies in the prototype & may call upon changing the prototype, requisitioning the information need & more user interaction.

Designer task becomes difficult if multiple users of the same system & inputs they sue, are used by some other users as well.

EX: A lot of input data comes from purchase deptt. which is used in accounts & inventory management.

Attitude of various users & their role as the originators of the data needs high degree of positivism.

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LIFE CYCLE APPROACH : There are many systems or subsystems in MIS which have a life cycle – They are very much structured & rule based – they have 100% clarity of inputs & their sources, a definite set of output & these remain static for long time.

Minor modifications occur but not significant in terms of handling either by the designer or user. Such systems can be developed in a systematic manner & reviewed after a year or two, for significant modification if Any. EX: Payroll, Share Accounting, Order Processing, Basic Accounting etc. Apart from core system, some decision support system can be developed through life cycle approach.

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MISSION GOALS

IDENTIFY INFORMATION

NEEDS

DEFINE SYSTEM

BOUNDARIES AND SCOPE

DEFINESYSTEM OJECTIVE

EXAMINE FEASIBILITY

REFINE THE NEEDS

DEVELOP AND TEST

INITIAL PROTOTYPE

DEVELOP INITIAL

PROTOTYPE SPECIFICATIONS

MODIFYPROTOTYPE

SPECIFICATIONS

DEVELOPREVISED

PROTOTYPE

IS THE USER

SATISFIED?

DEVELOPAPPLICATIONWITH FINAL

SPECIFICATIONS

REVIEW

IMPLEMENTIN

PARALLEL

TRAINING

DOCUMEN-TATION

NO

YES

PROTOTYPE APPROACH TO INFO. SYSTEM DEVELOPMENT

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ASSESS FEASIBILITY

SYSTEM APPLICATION

INFORMATION REQ. ANALYSIS

CONCEPTUAL DESIGN

PHYSICALDESIGN

INSTALL THE SYSTEM

SYSTEM SPECIFICATIONS

PROGRAMSPECIFICATONS

DEVELOPTHE SYSTEM

CONDUCT AWARENESSAND TRAINING

OPERATE THE SYSTEM

REVIEWAND AUDIT

LIFE CYCLE APPROACH TO THE DEVELOPMENT OF MIS

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COMPARISON OF PROTOTYPING & LIFE CYCLE APPROACH PROTOTYPING APPROACH LIFE CYCLE APPROACH

1. Open System with High Degree of Uncertainty about information need.

2. Necessary to try out the ideas, Application & efficiency of the Information as a decision support.

3. Necessary to control the cost of design & development before the Scope of the system & its application is fully determined. Experimentation is necessary.

4. User of the system wants to tryoutthe system before the commits the Specification & information Requirement.

5. The system & application is highly custom oriented.

1. Closed system with little or no uncertainty system has no change significantly for long time.

2. No need to try out the application of the information as it is already proven.

3. Scope of the design & theapplication is fully determined withclarity and experimentation notnecessary.

4. The user is confident & confirms the Specifications & the information needs.

5. The system & application is universal & governed by the principles & practices.

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IMPLEMENTING THE MIS : Implementation of the system is a management process. It brings about organisational change. It effects people & their work style. – The process evokes a behavioural response which could be either favourable or unfavourable depending on strategy of the system implementation.

In the process of implementation, the designer acts as a change agent or catalyst for a successful implementation, he has to handle the human factors carefully.

User has a fear of (1) Cultural Change. (2) Change in his role

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Guidelines for successful implementation of MIS :

1. No question beyond the information need of user.2. Role is offering service : Not demanding.3. System Design is for User : Respect demand of user.4. Not to Mix Technical need with information need.5. Impress upon user the global nature of information system

design which is required to meet current & future need. 6. Impress upon user that quality of information depends on

quality of input.7. Impress upon user that information is a corporate resource

& he is expected to contribute to the development of MIS.8. Ensure user makes commitment to all the requirements of

the system design specification.

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9. Ensure the overall management effort has management acceptance. 10. Ensure user participation from time to time.

11. Realise that user is the best guide for path of development.

12. Do not expect perfect understanding & knowledge from the user as he may be user of non-computerised system.13. Impress upon user that change which is easily possible in manual system is not that simple in computerised system since program change required.14. Impress upon user that perfect information is non. Existent so he still has a important role.15. Ensure that organisational problems are resolved before system is taken for development.

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16. Conduct periodical user meetings on systems to understand difficulty faced by users.

17. Train the user on computer appreciation “Implementation of MIS is a transformation”.

Apply Lewin’s Model:

1. Unfreeze the organisation for people to be receptive.

2. Choose a course of action where process begins & reaches designed level.

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Factors Contributing to Failure of MIS : Many a times MIS is a failure. The common causes:-1. MIS is conceived as data processing & not information

processing.2. MIS does not provide that information which is needed

by managers.3. Underestimating complexity of business system & not

recognising IT in MIS design.4. Adequate attention not given to quality control of inputs,

the process & output leading to insufficient checks & controls in MIS.

5. MIS is developed W/o streamlining the transaction processing systems in organisation.

6. Lack of training & appreciation that user of information & generator of data are different.

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7. Lack of user friendliness & not meeting requirement of critical needs of user.

8. A belief that computerised MIS can solve all the management problems of planning & control.

9. Lack of administrative discipline in following the standardised systems & procedures, wrong codings, deviating, from system specification.

“MIS does not give perfect information to all users in the organisation Any attempt towards such a goal will be unsuccessful because every user has a human BIAS, certain assumptions, ingenuity etc. which is not known to the designer”.

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APPLICATION OF MANAGEMENT INFORMATION SYSTEM

Business application of MIS in functional areas of manufacturing sector:

1. Personnel Management2. Financial Management3. Production Management4. Material Management 5. Marketing Management

Business application services sector : 1. Hotels 2. Hospitals 3. Banking4. Insurance 5. Utilities

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The approach to application development is on the basis of Database MIS model of an application considers transaction processing as a basis. Online transaction processing system develops data (OLTP) for DBMS & application development is based on such database. (Model of Information Processing System)

A typical information system begins with OLTP system, uses RDBMS for creating database, 4GL for application development & SQL for querying & report generation.

The information system is designed on the principle of open system design, with flexibility & user

friendliness in mind.

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A typical information system primarily serves the needs at functional levels such as :-

Personnel, Finance, Marketing, Production Materials, & Corporate Business Management.

PERSONNEL MANAGEMENT:

Objective:- Provide suitable manpower in number & with certain ability, skills, & knowledge as required by the organisation.

Human resource information system (HRIS) is a system that support planning, control coordination, administration & management of human resource of the organisation.

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OLTPSYSTEM

ACCOUNTINGAPPLICATIONS

QUERY APPLICATIONS

ANALYSIS APPLICATIONS

CONTROLAPPLICATIONS

PRINT REPORTS SCREEN DISPLAY

STATUTORY COMPLIANCE

KNOWLEDGEUPDATE

OPERATIONUPDATE

DECISION ANALYSIS

ACTIONUPDATE

RDBMS

APPLICATIONDEVELOPMENT

SYSTEMSDATABASE

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Goal is to control personnel cost through improving manpower productivity.

HRD though training & upgrading skills. Motivation though leadership & Job enrichment. Grievance Handling. Structuring the organisation. Input Transaction Documents :

1. Personnel Application Form2. Appointment Letter3. Attendance & Leave Record 4. Bio-data Self & Family5. Appraisal Form6. Production / Productivity Data on Job7. Wage / Salary agreement 8. Record of complaint, Grievance, Accidents

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9. Industry data on wage / salary structure.10. Industry data on manpower, skills, qualification.11. Data on source of manpower : University / Institutions / Companies.12. Data on manpower utilisation trend in view of mechanisation, automation, computerisation.

Applications Development Areas :-A. Accounting :- Following entities are considered.

1. Attendance 8. Bio-data2. Manpower 9. Family Data3. Leave 4. Salary Deductions5. Accidents 6. Production Data 7. Skills

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B. Query :- Personnel management has to query on:-1. Who is who2. No. of Persons with Persons with particular skill 3. Manpower Strength & profile of a division4. Absenteeism / leave / late attendance 5. Salary / wage of employee6. Personnel records queries are processed with employee

number, skill code, department code etc. C. Analysis :-

1. Analysis of attendance & leave2. Trend in leave record3. Analysis of salary / wage structure 4. Analysis of over time

D. Control :- Projection of manpower need & recruitment plan / training programme preparation.

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E. Reports :- Mainly used by personnel deptt. & top management / divisional heads.

Statutory Repots :- By personnel function1. Attendance Record2. Strength of employee – By category: Permanent,

Trainees, Apprentices.3. PF / ESI 4. Accident Reports5. Income Tax Form 6. Strength of Employee etc.

Knowledge Update:- • Daily Attendance Report• Employee Strength• Joining & Transfer of Employees• Personnel cost by deptt., Job, Product• Periodic, Statement showing pers. cost, by salary /

wages, overtime.

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Operation Update:-1. Daily Attendance to plan workload2. O/T vs work completed3. Projected absenteeism & distribution of work load.

Decision Analysis:-1. Analysis of attendance by season / festival &

scheduling of jobs accordingly.2. O/T analysis by deptt. / employee & to decide

strength of personnel.3. Analysis of accidents & decide safe measures

Action Report:-1. Recruitment & additional manpower or subcontract 2. Reduction/transfer/reorganising staff for cost control.3. Preparation of training & development programme.

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Most of these reports are used by operating managers. Information need at top management comes when issues of controlling wage bill, new wage agreement etc. come up.

APPLICATION OF MIS Financial Management : Objective :- Primary objective is meeting the financial needs of the business by way of providing working capital & long term loans to run the business with the goal of containing cost of capital minimum.

Meeting Statutory compliance by declaring audited financial results, return filing & tax to Govt. & meet obligations of share holders.

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In meeting these objective, financial management uses tools: Break even analysis, cost analysis, cash flow projections, ration analysis, capital budgeting & ROI Analysis, Financial Modelling, Management Accounting, Expense Analysis / Auditing & Control.

Input Transaction Documents :-

Payments:- To suppliers, employees, share holders, financial institutions.

Receipts:- From customers,authorities financial institutions etc.

Transactions are payments & receipts & they are documented through journal vouchers, receipts, debit notes, credit notes, transfer document.

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Applications :- Major application is the Financial Accounting system which accounts for the financial transactions of the company & produce financial results.

The users are finance managers, cost controllers, auditors, top management etc.

Accounting System : The system accounts for all money transactions related to sales, production, purchase, travel, share holding etc. 1. Sales 8. Share Holders Fund 15. Budget2. Purchase 9. Income Tax 16. Fixed Assets3. Salary / Wages 10. Sales Tax4. Inventory 11. Excise Duty5. Expenses 12. Customs 6. Capital Purchase 13. OCTROT 7. Fixed Deposit 14. Consumption

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Query :- Query system gives debit or credit balance of an account. It shows details of transactions resulting in that balance.

Queries are normally put to ascertain the business results by subsidiaries. EX: Query could be on sales w.r.t customer.

Query could be on sales of the product.

Decision Analysis :- Financial Management calls for a number of decisions, based on analysis of financial status of the company.

The decisions are :- Borrowing of short term working capital, sources of finance analysis of debtor & creditor, capital budgeting, investment alternatives.

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Applications which support above decisions:-1. Cash Flow Analysis2. Source & Use of Fund3. Debtors Analysis 4. Creditors Analysis 5. Budget Analysis 6. Ratio Analysis7. Capital Budgeting & Ranking of Investment Alternative

Control:- Controls are exercised based on exceptions (Budget / Plan vs Actual)

1. Accounts Receivable 2. Advance to Creditors3. Valuation of Inventory for Disposal 4. Cost Over Run 5. Shortage of Fund in Excess of Plan

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Reports :- Major reports are statutory compliance & operations update.

1. Tax Returns 2. Registers : Sales Tax, Excise, TDS3. Declaration of Financial Results to Public4. Annual Results to Board.

Knowledge Update :- 1. Monthly Trail Balance2. Balance Sheet3. Profit & Loss A/C4. Stock Valuation 5. Cash Position6. Expenses on Major Accounts7. Sales / Purchase by

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Operation Update :- 1. Filing of Statutory Returns 2. Statutory Payments : Advance Tax, Sales Tax /

OCTROI3. Report on Finished Goods / Despatch / Invoicing 4. Report on Material Receipt & Payment 5. Rent / Insurances

Decision Analysis :- 1. Break even analysis for cost & price decision2. ROI analysis 3. Analysis of current & fixed assets4. Analysis of current liabilities5. Analysis of overdue receivables

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Action Update :- Exception Reports for Implementation:1. Overdue Receivable – Legal Action / Termination of

Contract

2. Non-supply of goods & services – Legal Action / Revise Terms / Termination

3. Poor Usage of Fixed Assets & Disposal

4. Non-Moving Inventory Say: Y 2 Years.

5. Evolving New Systems & Procedure to Control Expenses

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Production Management :

Objective :- To provide manufacturing services to the organisation & involves manufacturing to certain specified quality & cost within stipulated time.

Input Transaction Documents :-

1. Production schedule 9. Material requisition

2. Process planning sheet 10. Customer order3. Job card4. Job status advice5. Quality assurance rating form 6. Finished goods advice7. Breakdown advice8. Material requirement

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Standards & norms are used for production rate, available capacity etc.

Application :- Production Management is performed through production planning & control, bill of material processing, drawings & process planning, scheduling & monitoring systems.

Accounting :- Production Management accounts for no. of entities such as:

1. Quantity of Production over a time period2. Managerial Requirement & Usage3. Rejection Quantity4. Breakdowns 7. Machine

Utilisation5. Labour Utilisation 8. Labour Hours6. Use of Power/Fuel/Consumables

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Query :- Relates to seeking status of job or information on machines, workers etc.

1. Status of Job Order 2. Production Program3. Load on Machines4. Status of Material5. Information on Machines/Tools/Process etc.

Decision Analysis:- Production Management function makes number of decisions. 1. Make or Buy or Subcontract 2. Alternative Material / Process3. Product / Job MIX etc.

Control :- Control through exceptional reports:1. Excessive Rejection 4. Continued Break Down2. Job Hold Up 5. Deviation From Standard3. Excessive Inventory 6. Backlog

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APPLICATION IN MANUFACTURING SECTOR: Marketing Management :- Satisfy customer scope of function : Identify need of needs customer, evolve product concept, designing & positioning the product & sell at appropriate price.

Activities Involve:-1. Market Research2. Consumer Survey 3. Advertising, Sales Promotion4. Stocking of Product, Development Dealer /

Distributor network. Function has a very strong interface with

production &Finance Deptt. Relies heavily on supply of Goods, Enough

inventory. Source of finance is sales.

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Input Transaction Documents:- Most Common1. Customer Order 2. Order Acceptance 3. Delivery Notes4. Invoice / Credit Note / Debit Notes.

However, Marketing function needs lot of data which R not transaction based. EX: Market survey, Research, Production Journal Etc.

Application :- Accounting:- Highly process oriented accounting

application in marketing function. 11. Inventory1. Product Sale 6. Distributor 12. Receivable 2. Product Family 7. Customer 13. Market

Segment3. Sales Value 8. Excise Duty 14. Export Mkt.4. Sales Tax 9. Zone 15. Returns 5. Dealer 10. Area 16. Complaints

etc.

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Query :- Queries in marketing management are on Customer, Product, Price, Stock, Sale, Statistics (Past) on Sale etc.

Query can be on sales performance, comparison of customer groups, product group zones & areas, sales in relation to target, customer complaints, name & address of dealers / customers etc.Decision Analysis:- Decisions on pricing, allocation of stocks to orders, discounts commission etc. & most of these are rule based supported by DSS.

Complex Decisions Are:- Price increase or decrease, deciding on a new product packaging, distribution,product positioning these decisions are of strategicnature.

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Applications are developed to support these decisions :- Break even models, risk analysis mode, distribution model, network mode, product launch model etc.from the basis for taking decisions.

Consumer Industry have applications for information on customer preference, behaviour, response to Adv. campaign etc. Data is collected routinely to buildup independent data base on consumer profiles, product rating, buying decisions etc.

Control :- In marketing management factors requiring control are sales vs target, marketing cost vs budgeted cost, actual sales vs competitors sales. Applications are developed to report the comparison.

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Reports :- In marketing management knowledge update reports are: 1. Product Sales Ledger2. Sales Summary & Analysis3. Market Analysis 4. Competition Analysis etc.

These reports are based on summary of various entities such as orders, value, sales, stocks etc.

Operations Update :- These reports inform the details of the marketing operations.

A typical report will indicate daily orders received. Others are:-

1. Order Book 4. Invoice2. Despatch Report 5. Customer Complaints etc. 3. Inventory

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Decision Analysis :- These reports convey if the desired / expected results are realised or not analysis of sales is necessary to confirm whether choice of alternative is correct or not.

Action Update :- These reports will lead to such decision as price reduction withdrawal of product from market, changing the product position, allocating more budget for expenses.

Example: of action update reports:-1. Sales vs Target 2. Expense vs Sales3. Stock vs Budgeted Stock Level4. Complaints vs Number of Comp. Attended etc.

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Materials Management :-Input Transaction Documents:-

1. Purchase Requisition 2. Purchase Orders 3. Receipts of Goods4. Return of Goods to Supplier 5. Issue for Production 6. Return from Production7. Certification for Payment (Advice)

Applications :- 1. Forecasting & Planning 6. Issuing Material2. Procurement 7. Processing the Returns 3. Purchase Ordering 8. Bill Passing & Control4. Goods Receipt 5. Inspection

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Accounting :- 1. Purchase Quantity 2. Issue Quantity3. Stocks 4. Goods Returns 5. Rejections

Query :- For Price, Supplier, Stock etc.

Decision Analysis :- Majority of decisions centre around cost of material in a manufacturing operation. Decisions are related to price, stocking of items, reorder level, fixed order quantity etc.

Control :- On capital blocked in inventory, stock out situation, reliability, dependability of supplier, cost of purchase.

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APPLICATIONS IN SERVICE SECTOR Unlike manufacturing, the service sector does not have physical good’s to be manufactured. MIS normally found in manufacturing will not be suitable for services industry. Mission in services industry is to provide most satisfying service to customer. Hotel Industry :- Service is the focus for Hotel Industry. MIS addresses the issue of assessing customer expectations. Information kept in customer data base are:-

1. Type of customer 4. Service Demanded2. Purpose of visit 5. Country etc. 3. Duration of Stay

- These information will help anticipate service expectations. Keeping Track of Customer Profile.

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- Monitoring Occupancy Level- Project Future Needs- Monitor Level of Expectation- Monitor Communication Need- Customer Database.

Hospital :- Health Care Industry. Front End Application :-1. Patient Data Base:- Handle query on the existing & patients treated earlier queries may be from visitor,

doctor etc. 2. Medical Server Database:- (1). Name, Address, Tel. No.

of all medical staff, Holidays, Work Times. (2). Important Service Centres (Labs, Blood Bank, Special Clinics)

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3. Resource Planning & Control :- Online query facility on scheduling of resources & facilities.

4. Medical case history database. Back Office Applications:-

1. Core applications:- Manpower & personnel planning, Payroll & employee related processing, Financial Accounting, Resource Utilisation & Analysis, Inventory Control.

2. Clinical Control:- Stock out of drugs, patients waiting time & service cycle etc.

Banking :- Is a place where financial service is offered. Customers choose a bank mainly on factors like:1. Ease of Doing Business 2. Quality of Staff & Service3. Range of Services

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MIS design considers following:-1. Customer Database:- Customer, category, range of

service, working HRS - Service depends on 2. Service to Account Holders:- Non-moving A/C, A/C

Having Balance Below Minimum, Default on Loan Payment.

3. Service for Business Promotion:- MIS collects data for future business strategy for banker to go out for customer.

4. Human Resource Upgrade:- MIS identifies needs for training of staff & customer orientation.

Insurance :- (or Risk Management) Insurance covers, Risk of the Customer, Risk may cover

‘Life’, ‘Liability’, ‘Accident’, ‘Breakdown’ etc. & loss / Theft.

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Success of Insurance Business Lies in how efficiently & effectively claims are handled, accurate billing, record keeping etc.

1. Information for New Products / Services2. Settlement of Claims3. Management of Policies

Utilities :- Water, Power, Gas, Telephone, Credit Cards, Paging etc.

Inputs are Name, Address, Meter No. etc. Outputs are Bill, A Notice or Claim. These Applications are developed with a life cycle

approach with strong validation focus. MIS Reports in utilities are:- Amount of consumption,

amount billed, consumption pattern, no. of meters installed (working/not working), complaint analysis, maintenance, stores / inventory etc.

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Meter Reading

Data Entry

Data Processing

Bill Processing

Bill Printing

Mail to Consumer

Bill File

Updated BillFile

ConsumerLedger for the

Month

ReceiptsAt collection

Centres

Data Entry

Receipt Processing

ReconcilingWith the

Bill

Bills

Process for

Finance Ledger

Payments

Receipts

BankStatements

Bill File

PreviousMonths

Ledger File

Ledger File

Ledger for theMonth

General Billing Application Model

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DECISION SUPPORT SYSTEM (DSS) DSS are applications of Herbert Simon. DSS Helps information system in intelligence where objective is to identify problem phase. DSS helps in making a decision & also its performance evaluation. In decision making: (1) Programmable (or Rule Based) Decision :- Can be computerised. & Predetermined (2) Non-Programmable Decision :- Rules are not fixed & requires user to go through Herbert Simon cycles every time. DSS is a class of system which support the process of decision & not decide by itself. Attributes of DSS: (1) Flexibility (2) Simple Models (3) Database.

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Types of DSS :- 1. Status Inquiry System 3. Information Analysis System2. Data Analysis System 4. Accounting System

1. If status is known, decision is automatic i.e. status &solution are unique relation.

2. These decisions are based on comparative analysis & use of formula. EX: Cash flow / Inventory Analysis.

3. In this system, data analysed & information generated. EX: Sales Analysis, Accounts Receivable, Market Research Analysis.

4. These systems are desirable to keep track of major aspects of business.

5. Model Based System:- These are simulation optimisation models for decision making. EX: Product Mix Problem / Job Scheduling, Facility Planning etc.

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Example :- Materials Management System

Decision Type of System Required Selection of vendor Inquiry System

Procurement Inquiry System

Pricing Data analysis

Selections of vendor based on Information analysis systemprice, quality, performance

Selection of capital asset Return on investment analysis system

Inventory Retionalisation Valuation of inventory and accounting system

Management of inventory within Inventory optimisation model Various financial and stocking constraints ILLUSTRATION OF DSS TYPES

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System Input Source System Hardware* User

1. Inquiry

2. Data Analysis

3. Information Analysis

4. Accounting ROI

5. Model Based Control

(a) Database(b) Conventional

Database and other Files

Processed Data Files

Transactions Master Files and Database

Inventory Database and External Data

Query System

Packages of DPSystems

Analysis Progra-mmes and use ofsimple models

Transactions Processing System

Development of OR or Business Models

PC Servers and Clients

Mainframe or Servers, PCs

Mainframe, Mini, Super MiniServers, ClientPCs.Mini, Mainframe,Client / Server

Mainframe, Mini,Client / Server

Clerks, Assistants

Operations Managers

Middle levelsManagers

Middle and TopManagement

Middle and TopManagement

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Components of DSS :-1. Database Management System (DBMS)2. Model Management System3. Support Tools

DBMS :- The data in DSS Database are managed by the DBMS, which covers compilation of data, manipulation of data, data generation, data updating, data maintenance.

Model Management:- These system stores & accesses models that are used to make decisions in designing a manufacturing facility analysing financial health of organisation. Most models are quantitative.

1. Support Tools:- Like online help, pulldown menu’s, graphical analysis, error correction etc.

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DSS Models :-

DSS

Behavioral Model

ManagementScience Model

OperationsResearch Model

(1) (2) (3)1. Helps understanding the behaviour among business

variables trend analysis, forecasting, statistical analysis model are EX: MFG.

2. These are based on principles of Business Management, Accounting & Economics.EX: Budgetary System, Cost Accounting, Capital Budgeting etc.

3. These are Mathematical Models EX: Maximising Profit / Minimise Cost etc.

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ENTERPRISE MANAGEMENT SYSTEM (EMS) :

For managing an enterprise in todays complex business scenario, various management tools information systems, CAD, DSS, CAM etc. What is needed in an integrated solution out of these technologies & systems offering an enterprise wide management support.

Such an integrated solution is called the Enterprise Management System (EMS).

Following systems when implemented in an integrated manner for coordinated & co-operative function of the business, give rise to EMS: 1. ERP :- Enterprise Resource Planning System2. EDI :- Electronic Data Interchange for Commerce,

Communication & Action.

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3. CAD/CAM/CAE :- Computer aided design & Manufacturing & Engineering System.4. AMS :- Attendance Management System for employee attendance or data capture on shop floor, gate etc.5. DMS :- Document Management System i.e. Imaging, Copying, Text Management etc.6. CMS :- Communication Management System such as paging, cordless, audio, video conf. 7. SMS :- Security Management Systems such as CCTV, Alarm, Warning System, Movement Tracking etc.1. ERP:- In the EMS, ERP System plays the role of front

running the system. It is the Hub of EMS. The major decision making & its execution takes place

through ERP. It is a system of managing all functions of the business

with information support coming through ERP.

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ERP

DESIGN ANDENGINEERING

COMMUNICATION

CAD/CAMCAE

AMS

DMS

EDI

SMS

CMS

ELEC

TRO

NIC

CO

MM

ERC

E

SEC

UR

ITY

AT

TEN

DA

NC

E

DA

TA

CA

PTU

RE

DO

CUM

ENT

MA

NA

GEM

ENT

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ERP

DESIGN ANDENGINEERING

COMMUNICATION

CAD/CAMCAE

AMS

DMS

EDI

SMS

CMS

ELEC

TRO

NIC

CO

MM

ERC

E

SEC

UR

ITY

AT

TEN

DA

NC

E

DA

TA

CA

PTU

RE

DO

CUM

ENT

MA

NA

GEM

ENT

Enterprise Management System (EMS) Components

SYSTEMS

SUPPORT

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Enterprise Resource Planning (ERP):

In the EMS, the enterprise resource planning system plays the role of front running the system. The major decision making & its execution takes place through ERP. It is a system of managing all functions of the business with information support coming through the ERP. It handles the operational systems in run the business & provides required inputs to planning & control systems handled by middle management. With internal sources of information & use of information from external sources, it provide decision support information for strategic planning & control to top management.

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Electronic Data Interchange (EDI)

ERP is supported by various other support systems, which manage independently. The specific requirements, & provide inputs to ERP.

EDI assists ERP in connecting two systems electronically for E-mail, document transfer, data transfer etc.

Designed to handle commercial functions (E-Commerce) and acts as a gateway to interact with the vendor, customer and other organisations.

CAD / CAM / CAE (Computer Aided Design, Manufacturing, Engineering)

These systems handle Design, Manufacturing & Engineering functions.

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Provides drawing & design engineering information to the ERP for manufacturing, purchase & inspection functions.

These are equipped with database management facilities & the database act as backup support to ERP.

AMS (Attendance Management System) These systems keep track of employee related information for personnel planning, availability & scheduling. AMS provides static information about an employee through HR system & current dynamic information such as presence, shift, kind of job etc.

DMS (Document Management System) is Designed to keep important document in database for viewing, sending MSG. & documenting support in transaction processing. It handles document access, editing, copying etc.

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CMS (Communication Management System) Used for tracking (or information) about important resources and action.

SMS (Security Management System) This handles the security, entry / access requirement of business operation. It may be persons material, movement etc for security & safety. EX: A truck will not be allowed to enter unless it is authorised one & then it will be weighted &weight transferred to EPR for processing further information. EX: An employee movement can be restricted or prohibited to select areas & sent to ERP for further processing. Above systems act as support to ERP.

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Above systems are extensively used for the mainpurpose they are installed for specific purpose use

specific technology. Above systems operate on their native systems &

interfaced to ERP through gateway softwares. The EMS can be defined as a network system comprising ERP, the EDI, the CAD / CAM/ CAE, the SMS & DMS for Autonomy, Integration & Distributed Functionality. The ERP is based on transaction processing system.

ERP SYSTEM :- ERP system deals with the planning & use of resources used in business. Resources are finance, materials, human resource, manufacturing capacity / infrastructure etc.

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ERP provides methodology of assessing resource needs for a given business plan.ERP provides a support system in the transaction processing, updation & reporting across the functions.ERP is a package encompassing all major functions of the business.ERP package build information base & provide knowledge base for planning & control of business.ERP is the main system interfaced / assisted by other systems. These systems provide database to the ERP or support ERP by basic data input. EX: Manufacturing system module of ERP is interfaced with the drawing, engineering database for query, viewing etc.

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ERP architecture is client / server based & uses object oriented technology for design / development of system. These packages are RDBMS based. ERP key advantage is that it provides an integrated

solution for all the business requirement. ERP addresses the issue of data integrety, information transparency, seamless integration & communication.

A typical ERP package solution has following module :-1. Sales, Marketing, Distribution 5. Personnel 2. Manufacturing 6. Maintenance3. Stores Management 7. Purchase, Inventory4. Finance 8. Planning & Control- All the ERP solutions provide report writer for user to create reports.

165Syste

m Structure

Management Structure

Enterprise Need

Mission Goals

Targets

EISAnd DSS

Analysis And

Control Modules

ERP Modules

Interface ModulesEDI, CAD, AMS, DMS, CMS, SMS

Strategic

Management

Tactical

Management

Process

Management

Operations

Management

DATA Capture, Storage

And Communication

TransactionProcessing

Planning, Execution,

Control

Decision Making

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Technology in Management Information System

- Type of Processing

Data Processing :- Involves following steps or stages to be implemented before data is accepted in the system for usage.

1. Confirming the character, structure & presentation vis-à-vis data design. (EX: DD-MM-YY)

2. Checking value of Data / Range & Limit.3. If Non-Conformance is seen, Point out Error.

Character of data decides quality of information & data processing is handling raw data in a systematic manner to confirm the data quality standards as determined by MIS designer

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Transaction Processing :- After data is processed in a transaction, the next step is to

process the transaction itself on certain lines. A transaction is processed with reference to business

rules, correctness & consistency of data value & for validity of transaction for acceptance.

EX: Goods received as a transaction.Having checked the individual data entries, the goods receipt transaction is further checked for:

1. Purchase order must be present.2. Receipt as per scheduled date.3. Supplier has sent necessary supporting documents like

excise gate pass, octroichallan, sales tax form etc. & any other conditions. Above are business rules for goods received

transaction.

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Next check in transaction processing is to confirm internal consistency, correctness & completeness of data. In above Ex., consistency should be confirmed between quantity sent, quantity recd., quantity accepted, quantity-rejected etc. Check also on entry tax etc.

Next check after data quality & observing business rule, is for validity of transaction.

Application Processing:- After data & transaction processing, the data finalised get posted to affected files.

A application processing is designed to process more than one type of transactions to bring out specific business results. This processing is carried out once transaction is processed for its validity.

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EX: Inventory application which requires the receipt & issue transactions duly validated two transactions are processed, the inventory is updated for receipts &

issues giving net balance at the end of processing each item. In inventory application it is designed to bringout inventory status affected by inventory transactions. During the application processing certain file get updated. EX: The stock file is updated in this example.

Application processing brings out various status & trigger actions. EX: Besides stock file updation, the stores ledger will change. If stock level is below reorder level, it would raise a purchase requisition if it is below safety stock level, it would raise purchase reminder on the supplier.

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The advent of communication technology & its embedded use in application processing, enables processing of results, triggering predefined actions & communicate with inside & outside agencies.

Information System Processing :- System processing is at a higher level, over application processing. System is defined as a product made up of several applications sets in orderly manner to produce a higher level information output than application processing. EX: Financial system is a product of finance, sales & purchase accounting applications. System processing addresses the Management Issues of Business.

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EX: In the Financial System, processing is done for cash management asset & liability management, working capital management etc. Applications that are used for financial system processing are : 1. Finance Transaction Accounting2. Fixed Asset Processing 3. The Receivables & Payables Processing4. The Sales & Purchase Accounting EX: System processing provides analysis of finance

management i.e. insight into the funds flow, source & use of founds, profitability & productivity of business. - Throws light on growth (Past & Future) through trend analysis. - Above outputs of system processing are generally required by top management.

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DATA TRANSACTION APPLICATION SYSTEM

SYSTEM ENGINEERING

DATA ACQUISITION PROCESSING NETWORKING COMMUNICATION

System Engineering Scope

(1) (2) (3) (4)

Human Factors & User Interface :- Information is designed for human beings who are the users. Use of information system is made through an interactive process between human beings & the system through which information system is activated, operated & closed.

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It is essential that user interfaces are built properly to avoid discomfort to the users.

The human factors of design of interface are:-Human Perception, Human Skills, Behavioural Profiles etc.

EX: The use of information system is accomplished through a visual media. The user reacts to printed reports, graphical presentations & displays on the screen. The speed of extraction of information will depend on display design which includes text side, the font type, the text length, use of upper case, application of colour etc.

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Real Time Systems:-

Real time systems are on-line & triggered by response to external events.

Real time systems have following design components :-

1. Data Acquisition2. Measurement, Interpreter & Evaluation3. Decision making & Action 4. Operation & Control

EX: Process control, Traffic management, Aerospace Systems & Instrumentation.

Real time systems respond to external stimulate in a time which is governed by external world

Hence performance depends on speed of response.

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DATABASE MANAGEMENT SYSTEMS (DBMS) Database Concepts:- A database is an integrated collection of well defined data & information centrally controlled in all aspects created & stored in a typical structure for an organisation. The data structure & its storage should be such that it facilitates share ability, availability, evolvability & its management, ensuring integrity.

Why Database:-

Data in many systems are common & there is repetition of data storage in various systems. This is data redundancy & gives problems of keeping data current & same in all files & also integrity & inconsistency.

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EX: Consider materials management function with three systems :- 1. Purchase System

2. Stock Accounting System 3. Quality Accounting System.

DATA ENTITES:- Purchase System Stock Accounting Quality

Accounting- Item Code - Item Code - Item Code- Item Name - Item Name - Item Name- P.O. No. - - P.O. No.- Supplier Code - - Supplier Code- Delivery Schedule - - - Quantity Received - Quantity Received - Quantity

Received- Quantity Reject - Quantity Reject - Quantity Reject- Quantity Accepted - Quantity Accepted - Quantity

Accepted- Goods Received - Goods Received - Goods Received Note No. Note No. Note No. - Goods Returned Quantity - Goods Returned Quantity -

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Data Models :- To understand relationship concepts, following terms are

used:- 1. Entity :- Entity is a place, person, event or concept about

which information is recorded. EX: The Customer, Bank Account Part, Employee etc.

2. Attributes (or Data Elements) :- Attributes characterize the or describe the entity meaningfully. EX: If House is an entity, then attributes are color, number, owner etc.

3. Data Value :- Each attribute of an entity has a value & known as data value. The data value could be quantitative or descriptive, depending upon attributes. EX: Site of the house (SQFT) could be quantitative construction quality would be qualitative.

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4. Key Attribute :- Some attributes can be a key attribute of an entity. Using this key attribute we can find the value of other attributes. EX: “Customer No.” is an attribute of an entity “Customer”, form this key we can find the name of customer, his address & account balance.

5. Record :- Record is a collection of the attributes of an entity. The set of the attribute values is called a record. EX : Name, Address, A/C No.

Relation Types :- (E-R Diagram) There are 3 types of relation between entities. They can be

shown in an entity – Relation Diagram. (E-R Diagram).1. One to One 2. One to Many 3. Many to Many

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The symbols used in E-R Diagram:-

ENTITY

EX: Let us take the hospital environment to understand relationship types. The Patient, Bed, Room & Surgeon are the entities in the environment.

RELATION One Relation

Many Relation

PATIENT

OCCUPIES

ASSIGNED

BEDONE TO ONE (1)

PATIENT

ACCOMODATES

HOSPITAL ROOMS

ONE TO MANY (2)

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PATIENT

OPERATES

SURGEONMANY TO MANY

OPERATED

(3)

1. At a given point of time, a patient occupies a bed or a bed is assigned to a patient. Since the patient cannot occupy more than one bed, the relation is One to One.

2. At a given point of time, one or more patients are assigned to one hospital room hence the relationship between the hospital room & the patients is One to Many.

3. A surgeon operates on many patients or a patient may have been operated by many surgeons. Hence the relationship is Many to Many.

The relationships are built on assumptions that the patient hospital room, surgeon & bed have unique keys as

identifier.

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MIS & RDBMS :- MIS is supported by database in its endeavour to support the management in decision making.

The database models, be it NDBM, HDBM or RDBM play the same role in MIS.

With latest computer technology, the RDBMS have become popular & with SQL (Structured Query Language, It is possible to interact with database & satisfy queries using SQL. The development of SQL is a blessing to all users of database.

The attributes of good information i.e. accuracy, scope, timelines, form & so on can be easily achieved with the database approach to MIS.

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Modern MIS uses databases & SQL, 4GL programs & decision support systems extensively for information generation. MIS with database support offers business status, its analysis.

DATABASE

USER’S VIEW

PROGRAMMER’S VIEW

DESIGNER’S VIEW

MIS

SQL 4GL PROGRAMMES DSS

STATUS ANALYSIS DECISION

MIS & DATABASE

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Object Oriented Technology (OOT):- Concept.

With modern communication & computing technology, information need of business organisations underwent major change calling for a different approach for design & development of MIS. The conventional design approach based on structured system analysis & design (SSAD) with help of lifecycle / waterfall or spiral model approach was found to be grossly in adequate & deficient to handle changing information & business needs. With high computing & processing power, distributed processing, client – server technology etc, it is possible to look at the organisation in totality & also analyse the business in terms of processes as against functions.

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To handle continuous change in process of complex & speedy nature, new approach to MIS design is required & this new approach is object oriented technology (OOT).

What is Object Orientation? :- Object orientation is a technique for system modelling. We model the system using objects that interact. The objects are related to each other in one way or other. An object is an entity capable of saving information about a current state. EX : Customer order purchase order, invoice, work order, payment voucher etc.Objects :- Each of these objectives contain information which is unique & describes the current state of that object.

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For EX: Customer order has a number, product name, quantity ordered, price, value & delivery schedule. Current state of the object customer order is that it is not executed partially of fully. The moment the quantity is despatched, the current state will change to partially executed customer order. Hence, to customer order we associate despatch information through despatch advice affecting the current state of ‘Customer Order’ to a new state.* In object orientation, each object is represented by an information. - When objects interact, some information would change & some may not. EX: In customer order as an object, quantity will be affected, while price will not terms of payment would not be affected but value in balance would be affected.

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In object orientation each object is made of some other objects, which may have relations to each other. EX: In customer order, an object is made up of eight information inputs, which could be viewed as objects in themselves.

Customer Order :-1. Customer Address2. Product name3. Quantity Ordered4. Delivery Schedule 5. Customer Sales Tax No. 6. Terms of Payment7. Mode of Transport 8. Price & Discount.

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Client Server Architecture (CSA):-

Client server architecture (CSA) is a distributed, co-operative, processing environment with approach to network use. The concept is base on the fact that some function are performed best on a local some function are performed best on a local basis & some on central basis. A client is a user who accesses the network by means of a desktop computer. A server can be a computer of any size. - A mainframe, a workstation – that provides a control function for the networked database. The architecture has two components:- The client & server, where client makes a request & server processes the request & serves the client by offering the result.

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The clients & servers are connected to each other through a network component which handles communications between the two.

In CSA, the client sits at the front end & the server is at the back end. The client represents front end tasks requested by user & the server represents the backend tasks of processing & communications to the clients.

Simple architecture of CSA is where application is broken into two logical divisions : Data & processing logic.

While data sits on back end server & its management is done by DBMS & the application processing logic such as validations, updations etc. The application of business rules & computation is placed on front end client device.

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Broadly, the backend server has DBMS system & related application logic & the client has front end tools to handle requirements in terms of input process & output.

DATABASE

SERVER

Application Server Logic

NETWARESERVER

LAN or WAN

CLIENT

Application Client Logic

PC

CLIENT

Application Client Logic

PC

CLIENT

Application Client Logic

PC

Client Server Architecture Model

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Terminal Terminal Terminal Terminal

Main Frame Model

Host Computer Entire Application

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SERVER

PC

PC PC

PC

DATABASETIER-1

TIER-2

Entire processing logic sits on PC-ClientThe processing is distributed.

PC-Centric Client Server Model

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NETWORK :-

With PC’s workstations coming in the importance of mainframe & mini computers have gone. In today’s context : “Network is the Computer”.

Depending on distance / proximity, the PC’s / Workstations can be connected in a local area network (LAN). Wide area Network (WAN).

Functions of a Network :-1. Allows users / Departments to share for sources (Printer,

Storage etc.2. Allows information to be shared across the company

(Product Literature, Price List etc.)3. Enables electronic transfer of mail, document or data.4. Provides access to other computer systems in the N/W to

the data file for local processing need.

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5. With WAN, different computer can talk to each other for purpose of processing, sharing & communicating.6. Enables seamless integration of the functions & divisions at the operational level & also application level.

Network Topology:-

Terminal

TerminalCentral Computer

SystemTerminal

Plotter Printer

(1) A Simple Network Model

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(2) BUS Topology

PC PC Work Station PC

Cable

- Terminals are connected through one cable.- Communication takes place along the BUS.- If the MSG. Does not belong to the PC, It ignores the same.

(3) Star Topology

Central ComputerSystem

Plotter Printer

PC

PC

PC

Printer

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- Communication is Routed through the central system known as server.- Vulnerable to fail, if server fails.

(4) Ring Topology

PC

PC

PC

PC

- The communication moves with the address & at each station, address is checked for validity. If address is valid the communication is accepted. Otherwise it goes to the next PC in the ring.

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Features of a Local Area Network (LAN) :- Major features are :- Resource sharing, productivity &

scalable architecture for growth & expansion. LAN basically has three components :-

1. Server 2. The Networking Components (Cables, Hubs, Network

interface cards)3. A Terminal (PC, Workstation, Output, Device).

Network further has its own operating system (Network Operating System) NOS.

Data Communication :- Data communication is a process of transporting the data

from one location to the other. Airlines reservation system, automated banking & point

of sale system used in Deptt. store are examples.

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Computer A Computer BModem Modem

DigitalSignal

AnalogSignal

Digital Signal

Communication Link Examples of Network Usage:- Networks are used for file transfer. Used for interactive communication needs between locations. Network integrates various information applications (MIS) of an organisation. Network virtually breaks physical boundary of organisation & helps conduct of business across various locations. Network is used for E-Commerce. Used for mailing applications (E-Mail).

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Used for EDI : Dealer – distributor network. Network makes enterprise lean & a fast track organisation

Business Process Re-Engineering (BPR):- “Reengineering is defined as the fundamental rethinking & radical redesign of business process to achieve dramatic improvement in the critical contemporary measures of performance such as cost, quality, service & speed”. The approach to reengineering aims at customer focus. It requires different view of business based on process & not on tasks or function. “Focus is on improving process to provide value added service to customer”. It requires organisation restructuring & redesigning based on process aimed at enhancing the value desired by customer.

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Re-Engineering :- 1st Step :- Fundamental Rethinking 2nd Step :- Radical Redesign.1. Requires questioning everything that was followed,

practiced & found to be acceptable for centuries.- Questioning basic principles of management &

administration. - It requires vision, innovation & imagination.

2. Requires off loading the activity outside the business organisation, if it contributes to the cost & not customer desired value.

EX: A manufacturing business may be conducted in a certain manner i.e. buy raw material, process it, pack the finished goods, sell & distribute to customer. There are standard procedure & designs for these activities.

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Radical redesign calls for trimming & chopping these designs so that cost is reduced service is improved & customer gets higher value at higher

Business Process :-

The business is re-engineered through process reengineering & business has a number of processes which together produce the business resolution. Basic Elements of Business Process

- Motivation to perform certain activities.- Data gathering, processing, storing. - Information processing.- Checking, validating & control.- Decision making. - Communication

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A business process in any area of the business organisation performs through basic steps such as :- Receive Input, Measure, Analyse, Document, Perform, Process, Record / Store, Access, Produce & Communicate. These processes are performed a number of times & consumes resources & time.

“The reengineering approach attempts to eliminate or shorten the steps so that resource consumption is

reduced & time of process execution is shortened”.“It eliminates redundancy by eliminating the steps

which do not contribute to the value customer is looking for”. Value Stream Process:- All the processes, which generate & add value to the customer are called value stream process.

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The Approach to Re-engineering:- Identify processes & MAP them across organisation. Classify them by :- - Cycle Time - Information Intension - Over Heads - Decision Intensive - Capital Intensive - Risk Intensive. - Manpower Intensive Rank them by value to the customer - Cost / Price - Delivery - Quality - Product Value Classify processes by customer - Internal (User of Processes) - External (Buyer) Select Processes for Re-engineering - Organisational Need - Business Strategy - Market Need

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The Process Steps of BPR Exercise:- Recast people organisation into process organisation.Segregate process by customer type : INT. / EXT.Identify Process by :- - Impact on customer - High decision incidence - High information exchange - High incidence of checks, control, validation - High knowledge base. Determine value to the customer in terms of - Price / Cost - Quality Service - DeliveryIdentify enablers of redesigningSet a benchmark for achievement.

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Rank the process by: Feasibility/Cost/Value to Customer.Appoint teams for each process.Monitor the process reengineering.

MIS & BPR:- Any exercise towards building design of MIS will be preceded by BPR Exercise. Building MIS is a long term project so, it is essential to relook at the organisation. Business itself would undergo a qualitative change in terms of the business focus work culture & style & the value system. This will call for a different MIS. MIS will concentrate more on performance parameters evaluation & a monitoring tool to start with & then a control for the performance.

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The traditional MIS is function centered like Finance, HR, Marketing etc.

The MIS in reengineered organisation would be process centered, evaluating customer satisfaction, expectation & perceptions.

Role of MIS will be raised with BPR & following activities would be viewed for the management action.1. Control of process cycle time.2. Work Group Efficiency. 3. Customer Satisfaction Index.4. Process Efficiency & Effectiveness.5. Strength of Organisation in terms of knowledge, learning & strategic effectiveness. “Traditional role of MIS as a decision supporter will continue”.